A niche market is a specialized market segment where you cater to the demand of products/ services that are not currently being supplied to by the main suppliers. It is essentially a narrowly defined market segment.
Why establish a niche market?
Simply because of the great advantage of being the sole supplier – a monopoly, or a single dominant supplier – in your target market. Small businesses may be unaware of that particular niche while large businesses won’t bother with it. The trick is to capitalize on this and develop a niche market where customers are accessible and which isn’t already owned by an established vendor.
Why Niche marketing?
Niche marketing is a very effective means of advertising as it focuses on a specific target group. Unlike other forms of marketing which tend to focus on the entire market niche marketing centers around one particular market segment. This focus on a particular market segment enables you to address the unique requirements of that target group. There a few guidelines to follow when carrying out niche marketing:
1) Meet customers’ unique needs.
Product features and benefits must have a unique appeal to your target market (market niche). You have to provide a tailor made product that will satisfy the unique requirements of your customers. A good starting point is to consider all possible product/ service variations that you can offer.
2) Say the right thing.
It’s important that you speak out to your audience in their language when reaching out to your new market niche. This is to say that it’s critical to understand how your target market works and communicate with your target market as a member of the group not as an outsider. Product features may need to be altered including basic elements apart from carrying out a separate campaign for your new niche.
In situations where the new niche market isn’t affected by demographics (changes in language or customs, an understanding of the key issues of your member’s is still needed to succeed. For example, an online business, which caters to men’s leather goods, wants to also target working women.
As it is with men, they too prefer the ease of shopping online but in their case, they would like more content as they are then able to make a more comprehensive evaluation of the products and the company which markets them. The Web marketer needs to alter the way of communicating by way of expanding its site along with revising its marketing campaign in order to successfully generate more sales from the new niche.
3) Always Test-market.
Prior to taking your next step, perform an assessment of your direct competitors that you’ll encounter in your latest market niche. By doing this you will be able to determine an action plan of how you should go about positioning your products against them.
In order to obtain a good overview of the situation, it’s best that you carry out a competitor analysis by evaluating competitors’ brochures ads, and Web sites, while keeping a lookout for their key sales points, pricing policies, delivery and customer service for instance.
4) But what if there is no existing competition?
As hard as it’s to believe, having no competition at all doesn’t mean all is well. True, this might suggest that other companies haven’t as yet been able to come up with the product or service which this niche wants to buy. On the other hand, it may well be that various companies have attempted and failed in penetrating this group. It’s a good idea therefore to test-market your products carefully in order to determine the market’s response to your products or services and message.